Ecolabel products, such as organic products, are more expensive than their non-organic counterparts. If nearly all costs incurred when changing production methods from traditional to organic are paid in a subsidy, is that subsidy trade-distorting? It will most likely not be inconsistent with World Trade Organization (WTO) law. The paper evaluates various reasons why WTO law responds so poorly to these situations, questions the historical separation of market access and subsidy regulation that causes the poor response, and seeks other, new and innovative solutions. The paper covers a wide range of issues, including non-violation complaints and why process and production methods (PPMs) are so difficult to work with.
Journal of World Trade